Money

Watch for another selling wave in the stock market as investors are forced out of their low-volatility bets

One week ago, nearly everyone believed the stock market was overbought, over-loved and overheating – and overdue for a dip.

California in Recession? (Part III)

Back in mid-December, Political Calculations asked if California was in recession. Data released by the Philadelphia Fed suggests the answer is no. Figure 1: Coincident index for California (blue), and implied index value for June 2018 using leading index (light blue arrow, blue dot) against log scale. NBER defined national recession dates shaded gray. Red arrow at date of Political Calculations post. Source: Philadelphia Fed [1], [2], and author’s calculations. We have more data now than as of 12/14/2017, so it’s useful to retrospectively look back at what the indices showed as of that date. This is shown in Figure 2. Figure 2: Coincident index for California (blue), and implied index value for April 2018 using leading index (light blue arrow, blue dot) against log scale. NBER defined nat...

Janet Yellen: A True Public Servant

Janet Yellen ended her term as Chair of the Federal Reserve today. Source: Federal Reserve Source: @pcubab Rather than add my own encomium, I’ll just quote Jim Hamilton’s impeccably-argued case for reappointing Dr. Yellen: The economy and financial markets have performed very well while Yellen has been at the helm. To be sure, the Federal Reserve is just one factor in that, but a factor nonetheless. Unemployment has reached a 16-year low and stock prices made all-time highs. Monetary policy and financial markets are returning to normal and banks’ balance sheets are healthy. Markets have confidence in U.S. monetary policy, and so do I. I’ll acknowledge that I might have done some things differently. I’ve favored a slower trajectory for hiking interest rates this year and next than the Fed h...

Cramer’s guide to the sell-off: ‘It’s not the end of the world’

Jim Cramer walks investors through the market sell-off, how they should approach the action and what to buy.

Bitcoin is bottoming after a hair-raising plunge; expect a 70% rebound: Trader

Bill Baruch, president of Blue Line Futures, explains why he is buying the recent bitcoin sell-off.

With The Dow Down 500 Points, Here’s How Sure Everyone Was…

Well, the bottom is falling out for stocks on Friday afternoon on the heels of a hotter-than-expected AHE print that exacerbated the ongoing bond rout. At just in time for retail investors to get their asses completely burned after a January that saw a veritable avalanche of inflows into equity funds encouraged, in part, by Donald Trump and vacuous promises about the restoration of lost American “greatness”. Over the last couple of days, we’ve shown you a variety of charts that seem to suggest everyone went all-in at the worst possible time. On Thursday evening for instance, we noted that TD witnessed a 50% increase in client activity in Q4… … just as everyone is busy Googling “how to buy stocks”: Well this seemed like a great time to show you a series of other visuals that underscore the ...

BNY Mellon Downsizing In Advance Of Move To Disused Phone Booth In Jersey City

The Bank of New York was founded in 1784 on Wall Street, and for more than two decades loftily guarded capitalism’s main drag from a landmark Art Deco skyscraper at number one. Four years ago, however, it realized that it didn’t need more than a million square feet, what with the loss of the lucrative Argentine market, so it sold its historic headquarters and moved into 350,000 square feet at Brookfield Place, with commodious accommodations for interns and foosball tables. Now this, too, seems a bit roomy to new CEO Charles Scharf. The custody bank plans to relocate all of its employees from Brookfield Place, the downtown office complex formerly known as the World Financial Center, to a nearby building it owns at 101 Barclay St. The move consolidates BNY Mellon’s presence in New York, brin...

Steve Wynn’s Alma Mater Thinks He’s Basically Kaiser Wilhelm II

When I arrived at in West Philadelphia in the fall of 1999, the University of Pennsylvania had just named the heart of its campus for one Steve Wynn, a 1963 College of Arts and Sciences graduate (not Wharton). At the time, the grumbling was more about just how ugly the broad expanse of vegetation-free stone, topped by a giant, hideous version of the university’s shield, was, than about the name sitting under that shield, even if that name belonged to an allegedly mobbed-up gambling magnate. That did not bother Penn. After all, this is a school with no compunction about naming things for Michael Milken and gossip columnists who happened to once be married to Ron Perelman. Now, however, new things have come to light about Steve Wynn that make Penn look like rather fertile ground for developi...

Call The Close: Smoke ‘Em If You Ever Really Had ‘Em Edition

(marolse3 via eBay.) You clowns knew this bullshit wouldn’t last forever. The absurd cosmically inexplicable optimism that fueled your beloved rally dies with Janet Yellen. You thought she wasn’t magical? Then you have only yourselves to blame. Party’s over, so dust off those Dow 20K hats that you thought were so fucking adorable and use them to catch your tears and blood, then revel in the sick beauty of your narcissism and the whole inside that your will never fill. Call the close, you greedy fools, and regain some of that false sense of control that you persisted in believing was yours all along, for The Trump Bump is over! In fact, like all things good and pure, it never really existed at all! Same old rules: Closest guess without going over wins a Dealbreaker bag that you can use to c...

Super Bowl LII: The Ads Are As Meaningless As The Game

Someone already has lost the Super Bowl, we just don’t know who it is yet. While the Eagles and Patriots still have to play their football game on Sunday in Minneapolis, the other annual show on the NFL’s biggest night is, of course, the commercials, which are filmed, edited, and ready to roll during the game. Some already are available to watch online, if you are the kind of person who cannot wait to see advertisements, and if you are that kind of person, do ask yourself where everything went wrong. Reaction, as always, will be swift. Some company will get raves for a goofy spot, maybe featuring a puppy, that hits all the right notes. Another ad will be poignant and memorable. Peyton Manning will have been there to try to sell us something in a commercial that’s pretty good, but will anno...

Gary Cohn Spending His Day Hiding From His C- Average “Wharton” “Educated” Boss

Ok, so good news on the econ front. The January jobs report was a beat and on top of that, average hourly earnings are growing at their fastest y/y pace since 2009. “Bigly jobs!” “Tremendous wages!” Unfortunately for the stock market, this news comes amid an egregious bond selloff that saw 10Y Treasurys post some of their worst risk-adjusted returns ever in January. Without boring you with the details, at issue here is the rapidity of the rise in yields. Past a certain point, market participants stop looking at rising long rates as a barometer of the robustness of the recovery (and thereby a validation of the reflation narrative) and start worrying about whether the Fed will find itself in the rather untenable position of having to hike aggressively (which would contribute to rate rise) or...

Everyone Can Relax, Steve Schwarzman Made Money Last Year

We know that many of you have lost sleep this year, laying in the darkness and pondering over the question that haunts us all as human beings: Did Steve Schwarzman make enough money last year? Well, thanks to some intelligently fun reporting from Crains’ New York’s Aaron Elstein, we can finally put your gentle minds to rest. Steve made like a billion dollars…cash. Here’s the math: Here’s how it works. First, Schwarzman is a major stockholder in Blackstone, owning 232 million shares, and he is paid dividends on those shares. The firm said Wednesday that it paid out $3.17 a share to common stockholders last year. (It calls them unit-holders, but never mind.) However, Schwarzman is in line for an even sweeter dividend, because technically his stock is in Blackstone’s holding company. For inst...